The Namibian Government wants to bar foreign and listed companies from bidding for fishing quotas. This is a mistake.
One of the greatest natural resource of Namibia are the abundant fishing grounds off the Namibian coast line. It is a treasure, and the government is right in saying that it should benefit Namibians, but they are wrong by insisting that all quotas must be allocated to Namibian citizens, and not foreigners or listed companies. This is a misguided decision on three accounts; firstly the scale and complexities needed to operate in the fishing industry, secondly the scarcity of capital and thirdly the message this policy sends to foreign investors.
Start with the complexities. To operate commercially viable fishing companies requires a fleet of ships that can stay at sea for weeks. They must be able to at least partially process the fish, pack them and get them ready to be delivered to the final destination within hours of getting to shore. The logistics are complex and often involve trucks and planes, because if the produce is not fresh, the customer would simply buy fish from another destination that can deliver fresh fish. In addition, these companies have got massively fluctuating overheads, predominantly fuel to run the vessels. Therefore, to be able to bring the product to the market profitably, these companies need volume (ie big quotas) and very deep pockets. Do we have enough local fishing companies that are able to operate in this volatile environment? Or would the recipients of the quotas just sell them on to a company that is able to handle the complexities?
Now to the second problem, the scarcity of capital. Put simply, capital is the total available money for investments. By definition, each country only has a specific pool of capital at any time. You can’t print more, because that causes inflation (ask Germany in the 1920’s or more recently Zimbabwe). It grows as investments grow, but that takes time. Thus, the available capital within Namibia can decide to invest a bit more into the fishing industry, but that would also mean that it has less to invest in other sectors, like agriculture. The best way to grow your economy, and thereby creating more jobs and more opportunities for all the citizens, is to attract foreign capital. In that way you can expand the fishing industry as well as agriculture. That is one of the distinguishing characteristics of wealthy countries. All of them were able to grow much faster than they would have otherwise, no matter where they started from. Think of Germany and Japan after the second world war, South Korea and now China, Vietnam and Eastern Europe, just to mention a few.
That leads me to my third point: the message the Namibian Government is sending. At a time of low growth and high unemployment, the message being sent to international investors is “we are closed for business”. They could help the economy, but instead, the door is being shut. India did something similar when they became independent. They insisted that they could do everything themselves and would no longer need any foreign help. It caused years of almost no growth, and rising corruption – because everybody was fighting for a piece of the pie, that doesn’t grow. Let’s not repeat the mistakes of others.
The rich fishing grounds should benefit all Namibians, and not just a few well connected who are able to get their hands on quotas. The fishing industry should be dominated by Namibians, as investors and employees, but don’t exclude the foreigners. Foreign investors, who deploy their capital in Namibia create jobs and opportunities for the locals.